Adam Smith

adam smith

Adam Smith

Adam Smith was born in Kirkcaldy, Fife, Scotland. His exact date of his birth is

unknown but he was baptized on June 5, 1723. At the age of fifteen, Smith began

attending Glasgow University where he studied moral philosophy. In 1748 he began giving

lectures in Edinburgh where he discussed rhetoric and later he began to discuss the

economic philosophy of the “simple system of natural liberty” which he later proclaimed in

his Inquiry into Nature and Causes of the Wealth of Nations.

In 1751, Smith was appointed professor of logic at Glasgow university,

transferring in 1752 to the chair of moral philosophy. His lectures covered the field of

ethics, rhetoric, jurisprudence and political economy. In 1759 he published his Theory of

Moral Sentiments, embodying some of his Glasgow lectures. This work was about those

standards of ethical conduct that hold society together, with emphasis on the general

harmony of human motives.

Smith moved to London in 1776, where he published An Inquiry into the Nature

and Causes of the Wealth of Nations, which examined in detail the consequences of

economic freedom. It covered such concepts as the role of self-interest, the division of

labor, the function of markets, and the international implications of a laissez-faire

economy. The Wealth of Nations established economics as an autonomous subject and,

launched the economic doctrine of free enterprise. In the western world, it is the most

influential book on the subject. When the book, which has become a classic manifesto

against mercantilism, appeared in 1776, there was a strong sentiment for free trade in both

Britain and America. This new feeling had been born out of the economic hardships and

poverty caused by the war but the British public and parliament still clung to mercantilism

for many years to come. Smith laid the intellectual framework that explained the free

market and still holds true today. He is most often recognized for the expression "the

invisible hand," which he used to demonstrate how self-interest guides the most efficient

use of resources in a nation's economy.

In 1778, he was appointed to a post of commissioner of customs in Edinburgh,

Scotland. He died there on July 17, 1790, after a painful illness. After his death it was

discovered that Smith had devoted a considerable part of his income to numerous secret

acts of charity.

In the piece entitled Four Percent Follies from The Accidental Theorist Krugman

discusses how some people think Alan Greenspan should let the economy grow faster.

Four Percenters, those against Greenspan, feel that he is not putting enough currency into

circulation therefore slowing growth. If more money is put into the economy then nit will

grow faster but if too much is put in, inflation will occur. Also, they feel that this will

remedy the low rate of unemployment which will soon cause inflation to spiral upward